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The people of Dawson's Landing live in a highly stratified, hierarchical society. At the apex of this social order are the descendents of the First Families of Virginia, represented by such characters as Judge Driscoll, Percy Driscoll, and Pembroke Howard. Below this level of quasi-nobility are white citizens who trace their lineage back to the state of Virginia (though not its founders), followed by other whites, then free blacks, and finally - occupying the lowest rung of Dawson's Landing's social ladder - slaves. So powerful is this social hierarchy, that those on the bottom are forbidden from sitting or eating with citizens of higher status. Instead, they are relegated to the kitchen. Further, this segregation is not limited to the household; the layout of the town itself is similarly structured, with the snug homes of its white population situated up front, while the slave-worked portion is hidden in the backcountry.

Having constructed this social framework, Twain is able to deliver a stinging critique of slavery and race relations in the Antebellum South. He does this by showing the arbitrariness of racial classifications. Roxy, for example, is a beautiful woman, and to the unknowing observer, appears to be white. Moreover, she is clearly intelligent and clever, as evidenced by her numerous schemes (such as the switching of the infants). Yet despite her intellect and beauty, the tiny fraction of her blood that is black reduces her to the lowest trenches of society. This arbitrariness is even better demonstrated by the two infants Roxy has been charged with raising. They appear nearly identical (even Percy Driscoll, father of one of the babies, cannot tell them apart but for their attire), yet because 1/32 of Chambers' blood is black, he is destined to a harsh life of servitude, while young Tom's pure white blood ensures him a life of luxury and comfort. The ease with which Roxy switches the children's destinies reveals just how malleable and arbitrary these distinctions are.

Pudd'nhead Wilson is unique to its time in its portrayal of slave characters. Most works of this period portrayed blacks as lazy, dishonest, and at times even dangerous. Often, this was a not-so-subtle attempt to spread the propaganda that blacks were an inferior class of citizens who were unable to function independently in society, and that slavery was in fact beneficial to them. Twain, by contrast, takes a different approach in this novel. Though he acknowledges that the slaves in the story steal from their masters, he frames it not as evidence of their flawed characters, but rather as a form of social activism. These acts of thievery are justified expressions of defiance against their oppressors - not desperate acts of greed.